tv Fast Money CNBC January 9, 2018 5:00pm-6:00pm EST
in small bites i think it's much more through public participation, money being thrown at stocks as opposed to just a slow repricing higher >> more like bitcoin >> exactly we're not entitled to it, necessarily. i think bill talked about, when people started throwing money at his fundsin the late '90s. >> that's how he knew. >> he doesn't know if that will happen yet >> thank you as always that does it for "closing bell." "fast money" starts right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," ethereum goe higher, leaving bitcoin in the dust tom lee says it could double in 2018, he'll be here to tell us what has him so bullish. plus cantor fitzgerald ceo howard lutnick called the
euphoria right after president trump was elected, right here on this show. he'll be here. first, we'll start with bonds. u.s. bonds the ten-year yield crossing a key level now well above 2.5%. rates have been range-bound for most of the past five years. it's the one variable markets haven't had to face yet. is a bond bloodbath ahead and if so, can stocks and rates rally again? >> i don't think we see a bond bloodbath. we've been in this range for the last four or five years. clearly low yields have been great for the stock market over the last seven or eight years. there will be some that argue if rates went higher, that would be good because it implies economies are getting better, global growth is doing well, stocks should do well, indeed. i would say this if rates rise, the u.s. dollar should rise. a rising u.s. dollar could potentially be a headwind instead of the tailwind we've
had with a weaker dollar so you can make many arguments this is the one thing i would say. you can't have it both ways. if low rates are good for markets, you can't have it that rising rates are equally good for markets. >> if we had a gradual move higher in the ten-year, the last time the ten-year traded at 3%, it was early 2014. the s&p 500 was at 1,800 we know they made what some people call a generational low in the summer of 2016, right into the election. and now here we are, we've had this stable rise in rates, and we've had the stock market at record low volatility just inching higher we would continue to be bullish if rates keep moving higher and the stock market with low volatility keeps moving higher >> as we get north of 3% gdp growth, which we're significantly higher than that, do you think that the fed is
actually find the curve? do you need we're in the right level of accommodation, do you think rates should be here i think absolutely not and if you 30(b)(think -- >> you think they should be? >> i think they should be. i think the bears out there, many are still clutching on to this view that we're still in a global deflationary spiral that comes after a huge credit bubble i would argue we've worked through a lot of that. but last night, the boj gives you the best i think sign that central banks may be starting to move outside of the fed when they at least lightened up a bit on their boj buying at the long end of the curve they were targeting five b bllis these guys have had a big impact on our yield curve >> this scares me a little bit because i'm agreeing with dannon something. >> really? are we starting out like that? >> the bonds going up and the
market going up, i absolutely agree with you as a matter of fact, i look at what's going on in terms of the options world, the derivatives world, and it's bullish. i love what's going on in the financials and industrials tax reform, all those things going in, infrastructure the global economies right now, and everything seems to be working in the strength. i think the markets can continue to go higher >> let me ask this, then right now it seems like goldilocks rates are within this range, they're just right but once we get more towards 3%, don't we then start questioning valuations, equity versus premiums come into question, right? >> you have to >> you have to that was part of the argument, valuations are so high rates are so low that we can have high evaluations. >> when you're valuing a company based on a risk-free rate, if the risk-free rate is zero, it's going to be make the company
more valuable than when dcf backed the profits and attached that rate. 3% is very different than 2%, very sensitive also i think you're going to see a lot of fixed income traders that were pushed into the equity market a lot of people pushed out of the risk curve that will be very happy to see a 3% ten-year >> if you look at prior market tops, we had a ten-year at 7.5% at 2000, 5.5% back in 2000, 2007 we're talking about 2.5% on its way to 3 to me, the best case scenario for equity investors who are you will bullish, i would love to see some discomfort. we can't keep inching higher we have to see some unfounded selloff. >> a more hawkish view >> sell off equities at 5:00%. then you have your shot to get back in. >> we have a new fed governor here if they start to behave very
differently -- >> hawkishly >> you'll have a market that will respond differently the market has been inured to possible volatility because the fed has squelched volatility markets have forgotten had you to trade and i think there's more volatility coming. >> what you said was also very telling, if the fed comes out and is more hawkish, the new fed, that is, equities will pull back that's the reaction. higher rates >> you should want a pullback. get a little fear back in the market here. >> why would that be the pullback that ends the bull market run >> i don't know. >> the s&p closed up three or four handles, pretty benign today. vix was up 6% today. i think the vix was up because the bond market got beat up today. maybe the vix is telling you maybe the vix is scared. one day does not a trend make. >> when you get on this whole
bond discussion, it's the velocity, right? we talk about that all the time in the markets specifically in that area, if it's a slow, steady chop towards that 3%, that's a different set of circumstances than -- we get spikes, when we start to see that start to move much faster than expected, that's when you'll see the pullbacks that tim is talking about, or you're talking about, dan, because people start to get scared and wonder but if it's a steady push to the upside, the markets can guide along with that. banks are soaring, no surprise to our next guest who saw the rally coming days after president trump was elected. >> i think you'll see financials explode higher because they're going to do better without the shackles being put on them and put on them and put on them. by the way, i think that will be really good for the economy. >> what a call let's welcome back howard lutnick, chairman and ceo of cantor fitzgerald, chairman of newmark group.
howard, great to have you back >> great to see you. >> i think a lot of us saw the value in what you said but didn't expect the strength of the follow-through of what you said where are we now in the bank rally, in your view? >> we're well on the way but the tax reform bill, cutting everybody's taxes so that every dollar they make, another 14 points goes to the bottom line, you know, people are focusing on the fact that they've got to repatriate some money from overseas so it looks bad for a quarter or two you know what, once that quarter or two is passed and the earnings pound forward, you're going to continue to see a positive market, people are worried, people are scared, they're just not used to a 14% corporate tax cut. i'm telling you, we're in for a continuation of what you have seen since the last time, i'll see you next year, same thing, same thing we're going to keep rockin' higher >> beyond just a mechanical cut
to the rate, are we going to see an increase in demand for various lines of business? are we going to see it translate into, for instance, increased loans? we haven't seen loan growth, business loan growth it's just been basically dry >> no, i don't buy you're going to see new loan growth i never bought that stuff. what i see is, the financial institutions are going to make more money they're just going to make more money. right? and they'll have less regulation on them and they're going to trade more and they're going to make more money. so financials are going to do better period they're just going to do better. it's not that hard to figure out. they'll pay 14% less tax, they'll have less regulation if i said you can't talk about this, you can't talk about that, this show wouldn't be as good as if i came in and said, talk about whatever the heck you want, you would be so happy, and your audience would be so happy because the show would be better that's all that's happening for financials the show is just going to be better >> you don't think the rally we've already seen is built in large part on this notion that there's going to be less
regulation and the shackles have come off >> sure. >> you said it so well in '16, the shackles were going to come off when we saw the rally. don't we know the shacks elles e off? >> when the volcker rule dies, they do that transaction, they make a couple of bucks, and they do it, what, thousands of times? i just think financials are in a good spot. i saw it last year when i was with you guys and i still think it's there i think it feels good. i came to talk about something else today, so i wanted to talk about newmark, our new public company. >> and new public company, so you obviously have a lot of concerns, coming up with a the new public company but you've outlined a great bull case, you were correct last year but you have to talk with your colleagues and say what can go wrong with this, what am i missing, what are we missing >> i just don't see, you know, to harm the stock market, you need to see a huge bump in the
interest rates and i don't mean, you know, two fed bumps and the ten-year goes to 3%, that sort of nonsense let's face it, if we talked about 2.5%, going to 3%, none of us would give a hoot, right? it's not going to change the world. and that requires a busting economy. you know, and so why would a busting economy, which would move interest rates, be bad for the stock market the problem is, it's not there sure, an exogenous event in north korea, whack job, something like that, fine. but you're in a market, good things are underlying, and there's no clouds. sometimes i see really, really dark clouds, right if you had seen me in april of '07, i would have told you the world was coming to an end that's why cantor fitzgerald did so well, because they were huge black clouds coming, and you could see it, you say, kids,
it's sunny now but it's going to rain in an hour. right now there's not any clouds on the horizon, it feels really good they just empowered every corporation in america to make more money that's unprecedented most people are afraid to actually say, wow, that's great. it's great for all the investors, all the pension funds, anybody who has money in this market will be a happy puppy. >> let's talk about newmark. in july you said on another show on cnbc that the trump agenda will help real estate and financials newmark is a commercial real estate company that will list on the nasdaq do you think that the agenda has come through the way you thought it would when it comes to real estate >> no, i think the market of low interest rates is great for real estate and i don't see it going anywhere of any material consequence. people are afraid of the -- you know, in the real estate market, we've had a nice long run. you know, isn't this a cycle
coming to an end remember, we talked about, this is the easiest monetary policy in the history of modern finance, right and when they're done with quantitative easing completely, you know what we'll enter? the easiest time of monetary policy in the history of modern finance. the cycle is based on something else it's not based on where we are now. where we are now is, you're going to see an extended cycle three years longer than people ever imagined. so i think real estate has a beautiful run to go. we just took newmark public at the end of december, because i promised everyone we would do it in 2017 and i like to live to my promises obviously it wasn't a great time to take it public. i ended up selling it to the public, selling 10%, but very inexpensively, right think about right now. we're trading 10 1/2 times, all they analysts public today,
brand-new, fresh, 10 1/2 times earnings all the peers, 17 times earnings they expect our growth at 30%. all the peers, 9%. so we grow triple everybody else, and we're 40% cheap. here's my guess. call me back next year and talk about newmark. newmark will be by far the best performing real estate services company in the united states of america. it won't be close. just like bgc financial, my other company, i've said it four years, up 40% a year for five years in a row people who get worried, like oh, you priced the stock kind of inexpensively, does that make you a flop i would say, i don't know, for the investors i would say it was a holiday. >> before you go, howard, i hope you do come back before a year goes by, that's a long time to wait for you bank earnings will start on friday, basically this week. do you have any guesses, anticipation how the market will
react? you mentioned the lumpiness of the one-time charges the banks will take to adjust for the new tax. >> the fourth quarter, they'll all take their charges for the fourth quarter they'll say, gee, that was bad and now let's not talk about that again each of them is going to say, what's the worst thing i could say, because i get a free ride of saying something lousy, even though business was fine, i'm going to say something lousy, then they'll start in the first quarter. and there's going to be confetti, right, and little horns, right and you'll watch financials start with the first quarter, and the second quarter post nicer and nicer numbers. simply because if they make the same amount they made last year, right, they'll be up nice single digits if they make a little more because regulation is coming down, you'll all of a sudden have double digits you start being up double digits quarter after quarter after quarter, your stocks will do well newmark up 30%, the analysts
expect the stock to go up 30%. you don't have to be a genius, you don't have to say the multiple will close. if the multiples close, the stock will be up 60% but if the stock stays dirt cheap, the stock will still be up 30%, so what? it went up 30% a year because the earnings went up 30% it's not that hard >> interesting case. you're so eloquent, howard it almost seems like you should be running for office, ever thought about that >> oprah winfrey is way more popular. look, i've got so much fun, you know, we just launched a new baby in newmark. >> you have your hands full? >> it's done so spectacularly, the ceo is such a great guy. when you have investors, they invest with you. these are people who now say, i rely on you and count on you, and they look to us. so i think my job for a good long time is to take care of them, to take care of investors who invested with and you say show them they made the right
choice in backing my management team and so that's what i'm focused on i am not running for anything. okay i'm not. i'm not ruling out, never. i'm only 56. but i think in my 50s it would be a hard challenge. >> howard, thank you for your time good to see you. come back before a year passes howard lutnick do you think confetti will come out after fourth quarter earnings >> i was raised, it always scares me when it's very hard to talk about or explain what the bear case is and nobody -- maybe there is no bear -- maybe howard is right, there's just sunshine for as far as the eye can see i can't believe that is in fact the case, though >> i'll tell you, if you look at banks, i don't think they've really started to price in tax reform if you look at a couple of these guys, howard talks about the opportunity for banks to certainly use the deferred tax benefit the banks actually had, we heard some negative stuff out of citi, some negative stuff out of goldman
the bottom line is this is a great environment for banks. the contaminaapital return is ar of this, remember the stress test the banks were put to you're getting 2% div yields could these companies trade at the same multiples we could be pre-2007 in terms he have bank price to book. >> we've talked about this a lot. if you look at the way they'll be able to use leverage, the deregulation story in 2018, the midterm year, it doesn't speak to this populist movement. to me, i don't see increased deregulation in 2008 coming up, bitcoin falling from grace, down about 25% from its all-time high in december. tom lee, the strategist with the hot hand on bitcoin, says the cryptocurrency could easily double in 2018 guy adami's favorite time of year, earnings season as all wall street waits with bated breath, guy will tell us one stock which is set for a major stock which is set for a major breakout
welcome back to "fast money. we've got a news alert on domino's let's go to morgan brennan >> reporter: hey, melissa, that's right, we have a leadership change at the pizza chain. patrick doyle, domino's ceo, plans to leave the company in june the board has named richard alison who is head of domino's international as the new ceo russell winer, currently the
president of dominos usa, will be taking on the role of chief operating officer of domino's, both appointments effective as of july 1st. a change in the c suite at dominos. shares are down a little over 1% in the after hours trade back over to you >> thank you very much, morgan brennan. of course patrick doyle loved, i would guess, by investors. he really was at the forefront in terms of bringing technology into the restaurants when people talk about using technology to increase productivity at a restaurant, patrick doyle's name is usually lumped in there, right >> and without question, and really, the concentratisolidati this pizza industry, it's part of why when you look at a 26 times multiple, at one point it was thought you couldn't do it it's now getting within five bucks of the all time highs. i think you take a pause >> maybe promoting the international head to ceo is a
good thing >> to tim's point, it is a big valuation. but the earnings growth is probably there to support it there's also a big shortage. i would say this if the shorts can't lean in on this tomorrow on the back of this news after the investor day, i do think it will push up towards that 221 level we saw back in may. i still think there's some runway left for this stock another news alert coming out of nissan at the consumer electronics show in las vegas. let's go to jon fortt with more. >> reporter: melissa, money will continuing to pour into the auto technology business. i talked to the chairman of mitsubishi alliance ventures is a new effort, $1 billion worth of money they expect to put towards startups through this effort over five years. the first deal is a company called ionic materials, a battery technology company that believes its battery technology
is cheaper and safer i've talked to him about what this move really means in the context of the other $50 billion internal investment that these companies are doing in advanced technology take a listen. >> obviously it's a substantial amount at the same time, we're talking about $1 billion, over $50 billion of investment, about 2% of the effort. i'm not worried about my companies now or three years down the road or five years down the road i'm worried for five year plus when i was making the turnaround of nissan, i was worried about next month, and i was worried about the next three months. so it's a completely different way of looking at things both very heavy. >> reporter: a survival issue both ways, but this one more off into the future. here at ces, a lot of talk about car technology some of it having to do with voice, for example this deal between amazon and toyota for alexa in the car
more money getting ready to pour silicon valley's way for the car technology back to you. >> thanks, jon fortt in las vegas at ces pete, a lot of opportunity in cars >> here we are at ces and they're talking about the automobile industry, which leads me towards texas instruments, nvidia, a lot of the different chip names some of them have performed great, texas instruments is one of them. other names are suffering right now, they're not really performing as well those that are actually very much hooked to the automobile world right now are doing extremely well >> yeah, listen, this is the theme. we've spent the last five years talking about smartphones, talking about cloud, it all converges in the car to me the smartphone world is fairly saturated here. these are the sorts of announcements, i did a power pitch a couple of weeks ago. >> fast pitch. this is "fast money. >> i was talking about the services agreement >> stop throwing things. >> as we did with alphabet's
waymo. everybody will be involved in this sort of stuff, whether services or technology >> what does this tell about you tesla? today, toyota also threw their hat in the ring. >> this says tesla is way ahead. >> maybe but -- >> in terms of miles driven. >> the assumption is there's no other players in the space in terms of autonomous, maybe you need to have the track record ultimately when you hear about gm in robotaxis, when you hear about toyota in the space, when you hear about the driverless car -- >> autonomy is only as good as the miles driven in order to get the system to become smarter so by having that tremendous lead in terms of hundreds of millions of miles driven -- >> if i was going to bank on someone's production coming through in time, it would be toyota's, not tesla. the multiple of tesla is disproportionate to the advantage. >> she got owned he owns you. >> no. we're just conversing here america has gone crypto
crazy. if you want those returns without the risk, we'll tell you how to do it with a different product. i'm melissa. you're watching cnbc, first in business worldwide meantime, here's what else is coming up on "fast." >> you won't believe how high tom lee sees bitcoin going by the end of the year. plus guy adami says one stock is going even hiergh the name when "fast money" returns. you always pay
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trading over the last month or so, because bitcoin has been a loser compared to other asset classes that give you an actual claim on an asset or a stream of income or have a physical quality to them. we all know that cryptocurrencies are volatile, and quoting performance information is subject to significant change we've seen the cboe bitcoin futures fall by around 20% over the course of the last month-ish. meanwhile, other things that you mine for like gold, up 5% in that same time frame, up 5%. oil prices up 10%. and the stock market as a whole measured by the s&p 500 is actually up 4% within the stock market itself, the hottest sector over the last year, technology up around 4% as well as measured by that spydr ticker trafficking in crypto is not without risk of loss and we're not even talking about some of the bigger losses we've seen in other digital coins like ripple.
melissa, a lot of movement happening in bitcoin compared to other asset classes. >> thanks, dom chu our next guest called the rally in bitcoin this fall now he's back with another bold call in the cryptocurrency tom lee, happy new year, good to see you. >> happy new year. >> what's your networxt call fo bitcoin? >> there's a lot of concerns about bitcoin being off its highs. i think it's a really healthy consolidation. at the same time, i don't think investors have fled blockchain we sent some materials over to show you the different sort of token sizes. and the mid-caps have almost tripled in the same time that bitcoin's consolidated i think it's a really healthy rotation taking place. >> where do you see bitcoin going? and do you think that is the coin that will have the greatest return in 2018 >> number one, i think the use case for bitcoin hasn't changed. it's a stored value.
that and ethereum are the blue chip names out there today i think bitcoin still has really bright prospects we think it's going to be at least 25,000 by the middle of this year and probably more than double that by the end of the year >> more than double current levels or more than double the 20,000 >> i think both. i think bitcoin is still growing its wallets, which is justifying an increase in the network value. but in terms of the 50 largest tokens, i think many of those are going to do significant better than that i think bitcoin is still a great portfolio diversification for investors. but i think this is the year when you see a lot of alt-coins continue to break out. >> i'm going to go back to the questions that i ask of all the coins, which coin do you see having the greatest return in 2018 >> well, so we have to be a little careful because we're treating these like recommendations. so we've only formally written about bitcoin.
but we've -- you know, we are tracking over 700 tokens in our database, that's how we're compiling these indices, and tracking advanced decline. we have a very structured view of what we're seeing out there again, i have to be careful what i talk about >> we talked about one of the creators of ethereum the other night on "fast money." he was talking about other uses for the ethereum platform, a lot of companies are building things on the ethereum platform, that's got a utility backing the value of the coin. does that matter what is bitcoin's utility? is ethereum superior to bitcoin because it has that functional utility versus being a stored value? >> there's a lot of fundamental differences between the two. because, you know, bitcoin has a money supply, it's a fixed number of tokens, it's a proof of work. ethereum could be proof of stake. it's a lot like gsm and cdma
back in the earliest wireless days, gsm was the universal cellphone system qualcomm developed a more complicated platform which ended up being more robust ethereum is a really amazing platform, but it's extremely difficult to program for so i think there's room for both >> tom, so i think earlier in the fall you talked about obviously allocating investable capital to this space. where does bitcoin fit if you're somebody at home and you're going to put money into it, what percentage of it should be bitcoin >> i think for an investor who is new to the space, bitcoin and ethereum should be the bulk of their allocation because they're blue chip names. they're going to get institutional support. the only futures you can buy are bitcoin. but for those who have spent some time, and i think if someone dedicates time, they're going to find a lot of
opportunities. and if they're a lot more flexible, of course their percentage to bitcoin and ethereum, even to the top ten, should be a lot smaller. i think it's really going to be an evolution of the at-risk appetite of the investor >> the bottom line is you think bitcoin and maybe ethereum will be the best performing assets for 2018 >> yes let's say they represent 60% of the blockchain capitalization. i think blockchain will easily be equities this year. >> easily. >> i think bitcoin and ethereum individually will be equities this year. the aggregate blockchain should do a lot better. >> tom, graded to see you. pete, your thoughts. >> it's all about risk appetites. it's a matter of how much of your entire portfolio, and second of all, within these various oins, how much and how do you want to allocate it across and where you think the biggest gains are. 5% or less is the smartest way
to be involved still ahead, do you want to make crypto without much risk? dan nathan will show us how. guy's time to shine, he's at the plasma warming up to pitch the one stock he says could be a home run for investors this earnings season. the name and much more when the name and much more when "fast money" returns how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than $1 a day! his secret? selectquote. in just minutes a selectquote agent will comparison shop nearly a dozen highly rated life insurance companies, and give you a choice of your five best rates. duncan's wife cassie got a $750,000 policy for under $21 per month. give your family the security it needs, at a price you can afford.
money. can you feel the anticipation? ♪ anticipation >> yes, it is that time of year again, we whip out the carly simon and place our bets kb home on wednesday, delta on thursday bob pisani is at the new york stock exchange with what to expect >> reporter: the s&p is up about 3%, its best start since 1987. earnings season is upon us with prices and valuations at record highs, it's fair to say that expectations are also very high this past quarter has been unusual. analysts have been even more optimistic than usual. analysts typically start optimistic and then lower earnings into the quarter. that hasn't happened in the fourth quarter investors are clearly hoping there will be bigger beats than usual and they'll likely punish companies with disappointing
numbers, more than usual only one-third of companies will raise guidance, two-thirds will lower guidance thanks to tax cuts, investors are expecting more companies to raise guidance than usual. this could be a problem because companies aren't sure how tax cuts will help their earnings. then there's buybacks and capital expenditures investors are expecting companies to announce some combination of more buybacks or increased capital expenditures thanks to tax cuts can ceo deliver on these high expectations early returns give some cause for optimism it's early, but 19 companies in the s&p 500 have reported earnings so far. oracle, carnival, fedex, carmax, constellation brands, average earnings growth has been 18% sales have averaged 11% growth, way above current expectations gains of 11% for earnings, 7% for revenue. if companies start pushing
buybacks and more capital expenditures, it's possible the rally could keep going melissa? >> thanks so much, bob pisani at the nyse speaking of earnings, guy is at the plasma getting ready to pitch one stock. >> i am, mel, thanks for having me here, i enjoy the show, watch it all the time. federal express has had a huge run. years of investments, they've been spending money hand over fist the last few years to improve efficiency, improve their hubs, and proimprove technology that will start to pay dividends in this quarter in the form of healthier margins. online sales were good, holiday sales were good, no denying that that should filter right into federal express's bottom line. recently, president trump said look at fedex, look at all the money they're making, the u.s. postal service, basically you're a bunch of dummies, you have to raise prices if the u.s. postal service
raises prices, it will give cover to ups and fedex to raise prices as well those three things plus valuation at 16 times forward earnings is still compelling in this environment i know fedex has run a lot but i still like it right here >> guy, ups versus fedex, how did you pick if he hfedex? >> straight valuation. the last couple of weeks have been very good to ups pretty much for all the same reasons. but again, ups is i think a little further behind fedex in terms of infrastructure spend. they don't have the same margins that fedex has i would rather fall on the size of fedex if you're asking me to split hairs. >> fedex announced bigger costs related to the tnt integration does this worry you? >> the tnt integration, there was that hack, obviously, with the tnt deal that was last march or april obviously there's some hiccups
long ti along the way. i think people understand they're going to be in the numbers. i think, listen, that's a one quarter thing they'll look past and then look at valuation and say, you know what, it had a huge run but it's still compelling valuation-wise. >> no more questions time to vote are you buying guy's pitch on fedex, dan >> i am not buying the stock with guy's money he makes a very good power pitch but to me -- >> fast pitch. >> i think you're going to get a better shot to buy it if you believe in all the good fundamentals >> fast pitch. how do you vote on the fast pitch, tim >> i vote buy, although i'm very puzzled why we're reporting on a stock that just had earnings, not one that's coming up >> march i'm giving you time. >> it's guy not playing the game again, one more time great pitch, guy, you're the man. >> i love ups, but i agree with guy. fedex, they all could work, buy. >> do you think guy delivered on his pitch for fedex? vote in our poll right n
now @cnbcfastmoney one of the biggest health conferences happening right now in san francisco, our own meg terrell is there standing by with the ceo of a top biotech company, meg >> reporter: hey, mel. one of the biggest topics is the tax overhaul we're talk to the ceo of a company whose rate is as l aows 15% after the tax overhaul, 15% after the tax overhaul, after this to improve short-ter. prevagen. the name to remember.
welcome back to "fast money. the jpmorgan health care conference under way in san francisco. cnbc's meg terrell is there with the ceo of regeneron >> reporter: thanks for being here >> great to be here, meg >> reporter: what are you going to do with the lower tax rate money? >> it's very exciting, we can have more cash, we can invested in our r&d and expand manufacturing capacities to support r&d. i think it's great >> reporter: you announced today some increased investments in both cancer and in your drug dupixint, cancer adding a billion dollars with the investment with sanofi that's a crowded class with a lot of drugs on the market already. how are you going to compete >> there may be a lot of talk in the crowd, but it's pretty early going in immunooncology. we're starting to bend the curve
a little bit in the fight against cancer we're really still way early in the innings, i think there's a lot we can do. we have a lot of technology and biology and a great product we'll be submitting we think to the fda this quarter we hope it will be approved this year and we should be off to the races. >> reporter: if there are multiple regimens on the market competing with each other, do you compete on price >> you know, we're a company that always feels that price should be part of the things you compete on obviously first you like to compete on the fact that you have a product where you've shown something that nobody else has. for example, this particular drug, although it's in a class of these so-called pd-1 blockers, we're the first company that's got data we think will be submitted to the fda for cutaneous squamous carcinoma that right there is something we can compete with >> reporter: thinking about pricing, in the weeks leading up to this conference, we saw dozens of drugs get their prices hiked by 10%, that seems to be
the new normal in this industry. what's your philosophy on that and the way the industry is regarded because of those price hikes? >> i'm worried when people say they're not going to price at double digit and then they come in at 9.5%, nobody is fooled, those are large increases, they far exceed inflation. i worry that this will provoke action by the government to try to rein these prices in, which would be really bad for the industry so i'm concerned about those moves. >> reporter: all right, len, something to watch in 2018 thanks for being here with us. that wraps it up for us, back over to you. >> great work, meg, thanks guy, what do you make of it? >> a lot of competition in drugs, the stock is down to $350 now. this level, 350, is exactly where we stopped on the downside last year. in my world, the risk/reward sets up well
jim cramer did an interview with the same gentleman a few months ago, he talked about the pipeline if you believe that story, if you believe in the valuation, i think it's worth a shod. >> more broadly, biotech bounced today. >> if you look at regeneron, the tax deal is very important these guys are now at a 15 to 18% effective tax rate i think that's interesting still ahead, ever wonder how you can make bitcoin-like returns without as much risk dan will show you after the break. you know what's awesome? gig-speed internet.
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this isn't just a corporate survival story this is a cautionary tale, that even the most iconic companies most innovate to stay alive. >> nice, mel >> i even have the same kind of hair >> fantastic >> that was almost ten years ago outside the kodak headquarters at its peak the dow -- take that down >> look at that. that should be your new twitter picture. >> we should find something older, actually. >> you'll have a twitter account for mel's kodak moment >> back then, kodak employed 145,000 people, was worth $30 billion. today, it joined the likes of long island and riot blockchain, announcing it's launching a cryptocurrency for photographers, and the stock
doubled. talk about a bad kodak moment. wow. if you're looking for bitcoin-like returns, you don't have to change your name, just look at options. dan will break it down for us at the plasma >> all this talk about doubling is pretty speculative. we make this point a lot on fridays at 5:30, on what show, guy? >> "options action." i love that show, i've been on it a number of times >> being long premium, you have to get a lot of things right to make money, direction, magnitude, and timing. people like to do it to define their risk and for leverage. let's talk about buying a call, making a bullish bet that's why you would buy a call. it gives you the right to buy a stock at a certain period of time, at a certain price those are the three main reasons why you would be buying a call option if you're looking to kind of look to leverage some sort of sharp move in a short period of time you know, when we think about this sort of stuff, there are not too many risk assets where
you can get doubles. that's what we've been talking about with a lot of this crypto stuff. when you're buying short data calls into events, you have the potential to do that bank of america will report earnings on january 17th the options market is implying about a 2% move in either direction. today when the stock was trading at 30.45, you could buy a 30 1/2 strike call for 30 cents that call breaks even at 31 bucks, okay? that's when you would basically be even on next friday's expiration to the upside to get a double you need a 31 1/2, up 3.5% that's a speculative view on a short term event >> in terms of the options world right now, are you more often finding yourself long calls, short calls, puts? what are you doing >> it's a great question, pete you know obviously with volatility so low, option premiums look pretty cheap but they're actually pretty
expensive because stocks aren't moving around a lot, not particularly volatile. it's a hard way to make money, even being bullish in an upward trending market. you have to get all those things right, magnitude of the move, time, and direction right. it's a tough game. it's speculative >> for more "options action," check out the full show, friday 5:30 p.m. eastern time are you buying guy's pitch for fedex? there's still time to vote there's still time to vote the results after this lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate.
you can fedex your friends to see the tony braxton number >> i'm so sorry. >> america has rejected guy's pitch for fedex. >> it's awful song >> sour grapes >> final trade pete >> gummy bears >> as much as we love home depot, i still love this name, lowe's had huge call buying,'s going higher giddy-up >> i'm with howard lutnick on the banks, b of a has the most >> i'm not a buyer of fedex at 257, i think you sell it here and look for an opportunity -- >> can we see that thing from mel lee in front of kodak again?
>> no. >> we're going to pull it up right now. look >> there she is, look at that. >> that's a girl >> she just made black >> what is your final trade? i'm melissa lee. thanks for watching. "mad money" starts right now "mad money" starts right now my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. we're in orlando, florida at the icr conference look, other people want to make friends. i'm just trying to make you some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcrame